ALL ABOUT OIL AND GAS

                                                     

Oil and gas is our most important fuel. 40 per cent of our fuel used is by the source. Oil is easier to transport in liquid form. 

   

Crude oil could contain natural gas. When it is contained in the oil it is called solution gas. If it is on top of the oil, it is a gas cap. These two types of gases are known as associated gas. Gas on its own in a reservoir is a non-associated gas. Natural gas has 80 per cent methane and is a clean-burning fuel.

This has a great advantage in our otherwise polluted world.  However, it is difficult and costly to transport. Most of it is transported by pipeline. Other possibilities to transport gas are to cool it and ship it as liquid natural gas (LNG)

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Oil and gas deposits are mostly state owned. If companies decided to drill for oil and gas it must apply for a licence to the government of that state.

Britain operates a careful selection of companies applying for a licence to drill. They have to prove experiences in oil-field-practice. A good knowledge on environmental issues is also necessary. Transport uses the most. The nature and value of oil is determined required. If they withdraw the oil too quickly it could damage the field.

If the oil field is not state owned, which is many times the case in the USA, the bidding for a licence will be in an auction.

The company which does the drilling is called an operator.  Many companies employ contractors to do the drilling. To detect and determine the size of an oil field sound wave are passed through seismically. These surveys are run to attract companies. The exploration of an area is dangerous and costly. Wildcat wells have to be drilled to determine the exact size of the oil field.

It is even more expensive when the suspected oilfield is in the North Sea. On discovery in 1980, a semi-submerged drilling unit cost £60,000 a day to hire. But only one in four wells was fuel discovered.  In the rest of the world it is only one in 20. However, it is cheaper than in the dangerous Northern water.  The invention of a floating platform to drill, store and offload oil made it easier to salvage fuel from smaller wells.

In 1986 the British Government sold its state owned British Gas industry. It was privatised and many companies were eager to buy it. The supply system of pipes and pressure governors is controlled by Transco. In 1996 the competition battled to receive a contract to supply gas to homes.